The S&P 500 Index fell 2.4 percent to 2,127.28 at 4 p.m.in NY, with losses accelerating in the closing minutes to finish with its biggest weekly drop since February. The index had notched record-high closes on Tuesday and Wednesday.
On Friday, Federal Reserve Bank of Boston President Eric Rosengren spoke in favor of raising interest rates, sparking speculation that the central bank may raise rates later this month.
Asian market and European market mostly down caused by increasing tension by North Korea nuclear test. The Nasdaq composite index lost 133.57 points, or 2.5 percent, to 5,125.91.
Low interest rates are a drag on bank profits, and the prospect of even a modest increase in borrowing costs would provide some welcome relief.
The U.S. Department of Energy fueled the run up by reporting on Thursday morning that U.S. petroleum inventories unexpectedly tumbled by more than 14 million barrels, which helped boost prices to $47.75 per barrel. Boston Fed President Eric Rosengren warned today that waiting too long to raise rates threatened to overheat the US economy and could risk financial stability. In recent weeks, few Fed observers have expected it to lift rates this month, speculating that a December hike is more likely, said Bill Northey, chief investment officer of the Private Client Group at US Bank.
"When we get to Washington, we'll be sharing views" and "really trying to come to a view on what that means for where the economy is and what the appropriate decisions are around monetary policy", San Francisco Fed President John Williams said September 6 in Reno, Nevada.
United States losses were broad-based across industrial and technology blue chips, with energy shares also hit by a reversal in crude prices. Restoration Hardware gained $1.34, or 3.8 percent, to $36.63.
With improvements in the overall commodities market, we have seen a surge in commodity stocks over the last six months.
"While the hope is that the weekend will act like a circuit-breaker, the concern is that given the uncertainty over the economy, interest rates, trade, high multiples and the United States elections, some profit taking may seem appealing". "A reasonable case can be made for continuing to pursue a gradual normalization of monetary policy".
COSTLY DEFECT: General Motors fell 2.7 percent after the automaker said it is recalling about 4 million vehicles worldwide to fix an air bag software defect that has been linked to one death. Britain's FTSE 100 was down 1.2 percent.
Kroger's KR.N was the latest grocer to give a disappointing outlook, though its shares pared losses late in the session to end up 0.6 percent. The stock fell 24 cents to $1.74.
German 10-year yields rose to zero for the first time since July after the European Central Bank downplayed the need for more stimulus. Gold futures declined 0.5%, as the ICE U.S. Dollar Index jumped 0.5% following Rosengren's comments.
The Euro consolidated in narrow ranges ahead of the US open on Friday with a slight downward drift in EUR/USD after the failure to hold above 1.1300 yesterday.